Australians’ credit scores improved last year, despite rising interest rates and higher cost of living, credit reporting company Experian said.
Experian said the average score increased by 40 basis points in 2022. Scores for people aged 18 to 24 and 25 to 34 increased the most – by 70 bps in each case. People over 65 had no change in their average score.
Credit scores are affected by such things as how well consumers manage payments and credit limits.
Experian’s director of client advisory Charlotte Rankin said in a statement: “The fact that average scores were maintained, and for certain demographics slightly increased, indicated that Australians adapted their financial behaviour to manage the challenging economic conditions. It also indicates they were able to draw on savings accumulated during the COVID lockdown period.”
But Experian cautioned that these conditions may not last. A survey of risk experts for its latest Risk Data Report found that all expect increased levels of hardship and default in the year ahead.
A key event will be the looming “interest rate cliff”, when home loan borrowers move off low fixed rates.
Experian cited Forrester research, which reported that 31 per cent of consumers borrowed more last year.